Failed Turkish coup reinforces the notion that airline seats are commodities

On a Friday in late July, the world watched tanks rather than planes rolling down the runway at Istanbul’s International airport. Though the coup attempt proved was short-lived, its impact on promoting air travel to and through Turkey was catastrophic. Specifically, Turkish Airlines had spent significant time and money establishing itself as an elite global airline.  Regrettably, a few hours of troubling images broadcast by CNN and other news networks has caused the carrier to unravel. Turkish Airlines business class seats have gone from “elite status” worthy of a pricing premium to a commodity nobody wants.

failed-turkish-coup-reinforces-airline-seats-are-commodities

For decades, Turkish Air was classified in most travelers’ minds as another mediocre eastern European carrier (i.e like Alitalia, Olympic, Tarom, and the now defunct Malev) with a below average business class product. Travelers don’t flock to mediocre airlines, and they don’t pay hefty premiums for business seats on mediocre airlines.  Though it may have been unjust or unfair, perception is reality. Turkish Airlines attempted to alter travelers’ perceptions and establish its business class as elite rather than a commodity.

With limited exceptions, most airline seats are commodities. Any traveler loyalty created by frequent flyer programs evaporates when a competitor with a similar product slashes fares. When fares drop BIG, history says traveler chase price over miles. Singapore Airlines and Emirates are both notable exceptions, where travelers do pay up for luxury regardless of competitor fares.  Emirates doesn’t even belong to a major airline alliance, but routinely asks New Yorkers to “pony up” $10,000 or more for the privilege of flying business class travel to Dubai. Turkish first analyzed and then emulated both Singapore Airlines and Emirates revenue model with success.

Turkish Airlines attempted to position itself as ‘Delightfully Different,’ selling travelers connecting in Istanbul was seamless and even pleasurable compared with both Singapore and Dubai. Until recently, Turkish Airlines’ plan was working, often commanding higher fare premiums than its competitors with full flights. The carrier even recruited Kobe Bryant as its spokesperson, demonstrating how comfortable Turkish Airlines business class seats can be for even the tallest of flyers.

Images of anarchy during the failed coup attempt reminded the world how fragile Turkey is. It has also caused travelers to flee from Turkish Air and abandon Istanbul as a connection point. Business class fares between the U.S. & Asia via Turkey plummeted. For example, business class fares between Washington and Bangkok via Istanbul with Turkish Airlines started at $5,899 before the attempted coup. Business fares to Bangkok have since fallen 56% and currently start at $2,580. Similar fare reductions with relaxed ticket restrictions can be found to most Turkish worldwide. While unfortunate, the failed Turkish coup is a reminder that Istanbul is not Singapore. No matter how hard they try, who they hire to handle their PR, or how good the Turkish coffee is, Turkish Air will never be able to consistently command excessive fare premiums.  Emirates and Singapore have proven business travelers will overpay for luxury, convenience and stability.

With the image of tanks rolling down the runway still fresh in most traveler’s minds, Turkish Airlines is once again perceived as mediocre and unstable. If your fare searches to Europe or Asia only return excessive fares, don’t buy unless you’re sure current fares are backed by genuine demand rather than speculation. You may consider using an analytical fare tool to determine if lower pricing is expected at a future date.

Lars Condor is the Managing Director of Passport Premiere.

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Comments (2)

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  1. Oliver says:

    Hi Lars,

    I am considering spending my vacation in Turkey next year – for the first time. I propose to fly. Can you tell me: has the attempted coup had any effect on foreign tourists? Are there any parts of Turkey that are considered unsafe for foreign tourists to visit?

  2. Robert Laney says:

    Oliver, Thanks for your interest in our post! Our area of expertise is international premium cabin fares and fare trends. That beings said, we came across this recent article in The Guardian which seems to address your questions:

    https://www.theguardian.com/travel/2016/oct/05/turkey-tourism-industry-reels-year-to-forget-istanbul-antalya

    Thanks!

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